Nexstar Stands Firm on Retrans Fees

May 4, 2005  •  Post A Comment

Nexstar Communications Chairman Perry Sook said Wednesday he isn’t budging on his stance against cable operators carrying his stations’ signals without paying a retransmission fee. He also indicated more cable operators could lose Nexstar stations unless they agree to pay a monthly per-subscriber fee.

Mr. Sook and Nexstar are currently locked in a pitched battle with Cox Communications and Cable One over Nexstar’s demand that the cable operators pay Nexstar a monthly per-sub fee of between 25 cents and 30 cents to carry Nexstar’s local network-affiliated stations in Joplin, Mo., and Texarkana, Abilene and San Angelo, Texas. Those cable operators refused to pay, and Nexstar pulled the channels from Cox’s and Cable One’s lineups. (The company does receive carriage compensation from the two major satellite operators.)

Others could follow.

Mr. Sook, during a conference call to discuss the company’s first-quarter results, said that a “substantial amount of [cable carriage] agreements” expire at the end of 2005 or in early 2006, and that while “the dynamics [of each market] will be taken into account market by market,” he isn’t backing down from his demand that cable operators pay broadcasters to carry their signals.

Mr. Sook noted that he was encouraged by comments by Viacom co-President and co-Chief Operating Officer Leslie Moonves, who last month floated the idea that his CBS and UPN stations might one day also demand payment from cable operators to carry signals from Viacom’s owned-and-operated stations.

According to Mr. Sook, the advertising impact of the standoff between Nexstar and cable operators has been minimal, with a number of initially skittish advertisers returning to the Nexstar stations after the release of February ratings data, which he said showed that the stations have not been hurt significantly by the lack of cable carriage.

However, the retrans issue loomed over Nexstar’s decision not to sign up for NBC Weather Plus, the 24-hour weather channel developed as a 50-50 joint venture between NBC Universal and NBC affiliates. Mr. Sook said that because NBCU’s business plan did not include being paid a sub fee, he wasn’t keen on bringing the channel to his stations.

Nexstar, which owns 46 television stations, posted a narrowed first-quarter loss of $12.8 million, compared with red ink of $16.7 million a year ago. Revenue fell 3 percent to $52.7 million, as an increase in several key advertising categories was offset by a $3.1 million drop in political advertising revenue.